A Beginner’s Guide to Investing in Mutual Funds: Tips and Strategies

Investing in stocks, bonds, and other securities through mutual funds allows investors to pool their funds and invest to grow over time. It gathers funds from several investors with similar investing goals to reinvest them and collect the capital gains that arise from it to distribute among the investors. So you should know how to invest in mutual funds if you are a novice.

A Beginner’s Guide to Investing in Mutual Funds: Tips and Strategies: 

if you are a beginner, you should know how to invest in mutual funds and their Tips and Strategies described below:

  1. By delivering a properly filled application to the approved Investor Service Centres (ISC) of Mutual Funds or Registrar & Transfer Agents of the relevant Mutual Funds, along with a cheque, one is able to invest in mutual funds.
  2. Through the official websites of the relevant Mutual Funds, one may also decide to invest online.
  3. One may also opt to invest directly, that is, without involving or routing the investment via any distributor, or with the assistance of/through an intermediary, i.e., a Mutual Fund Distributor authorized with AMFI.
  4. A bank, brokerage firm, or online distribution network provider are examples of non-individual entities that can be mutual fund distributors.

Before beginning to invest in any financial instrument, such as mutual funds, you must be Know Your Client (KYC) compliant. The following documents are required for KYC compliance

  • Recent passport-size photo
  • Proof of identity 
  • Copy of PAN card
  • Proof of address 
  • A completed KYC form. 

The offices of Registrars and Transfer Agents (RTAs) and Asset Management Companies (AMCs) both have the KYC form available for you to fill out. 

  • To assist you in meeting KYC standards, you can also request to be put in touch with a distributor of mutual funds or a financial advisor.
  • You can provide the AMC or RTA with these documents to process, verify, and update your KYC status. In-Person Verification (IPV) is a step in the KYC verification process. 
  • You need to verify your KYC form at KYC Registration Agency, AMC, or in RTA to do an in-person verification. 
  • You can also have the IPV performed for you by your mutual fund distributor. Investors should be aware that many AMCs provide the option of online KYC, which entails uploading the necessary paperwork and conducting your IPV through video chat.

Risk and return always differ among different mutual funds. You can get assistance choosing the best mutual fund product for your risk tolerance and investing requirements from a distributor of mutual funds or a financial advisor and know how to invest in mutual funds. You are able to invest in direct plans if you are a professional investor who is aware of your risk tolerance, has a working knowledge of mutual fund products, and is knowledgeable about the financial markets. Direct plans offer better returns than ordinary plans do.

The ability to transact in mutual funds via mobile apps is offered by the majority of AMCs and all RTAs. These mobile apps allow you to conduct all different kinds of mutual fund transactions, including one-time investments, extra purchases, STPs, SWPs, redemptions, SIPs, switches, etc. The Google Play Store is where you can get these apps. Some dealers of mutual funds offer mobile apps for conducting mutual fund operations.

UTI Small Cap Fund:

 The UTI small-cap fund invests in domestic equities to the tune of 96.27%, with 62.25% of its holdings in small-cap firms and 3.75% in mid-cap stocks. A total of 0.15% of the fund is invested in debt, with 0.15% of that amount in government securities. The UTI small-cap fund is appropriate for investors who want to invest for at least three to four years and who want to earn very large profits over time. As of April 21, 2023, the UTI small cap fund had 2,390.64Cr in AUM or assets under management, and an expense ratio of 0.63%. As of April 20, 2023, the UTI Small Cap Fund’s NAV is 15.80. 

Why Invest in UTI small cap fund?

  • The UTI small-cap fund aims to take advantage of the possibility of growth prospects presented by certain small-cap and mid-cap companies.
  • The UTI small-cap fund is a portfolio of sustainable companies with an extensive growth horizon that is well-diversified.
  • To find strong stocks and steer clear of weak ones, the UTI small-cap fund employs the 360° threat evaluation approach.
  • The UTI small-cap fund Follows a bottom-up choice of stocks strategy to choose companies with strong financial positions and the capacity to sustain margins over time.